Just taking one last look at this tonight, did a speed read the other day and thought there was a connection to the RIPA debt.
The logic to the moves ESPR mgmt is making, is becoming clearer.
Besides all the great news in and of the past 6-8 months, it's possible, imo, the issue of the convertible notes is the final impediment to the share price moving higher and /or a potential purchaser stepping forward. ( DS, imo is most logical)
Article 13 (particularly Section 13.01 (b)) gives good insight into the pieces of the ESPR puzzle and mgmt's strategic approach to mitigating the various indebtness, imo.
( will be busy all day tomorrow, if you can please post details of the Jeffries chat)
ARTICLE 13
Subordination of the Notes
Section 13.01. Agreement of Subordination. (a) The Company covenants and agrees, and each Holder of Notes issued hereunder by its acceptance thereof likewise covenants and agrees, that all Notes shall be issued subject to the provisions of this ?Article 13; and each Person holding any Note, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions.
(b) The payment in cash of the principal of and accrued and unpaid interest, if any, on, the Redemption Price or Fundamental Change Repurchase Price of, or any cash portion of the Conversion Obligation (if the Company has elected Cash Settlement or Combination Settlement) (excluding cash payable in lieu of delivering fractional shares of Common Stock) due upon conversion of, the Notes is subordinated to the prior payment in full, in cash or other payment satisfactory to the holders of the RIPA Debt, of all obligations under the RIPA Debt.
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(c) No provision of this ?Article 13 shall prevent the occurrence of any default or Event of Default hereunder.
Section 13.02. Payments to Holders. (a) The Company shall not make any payment on or distribution to the Trustee or any Holder in respect of the Company’s obligations under the Notes or repurchase, redeem or otherwise acquire the Notes if:
(i) a default in the payment of any RIPA Debt occurs and is continuing beyond any applicable period of grace; or
(ii) any other default (a “Nonpayment Default”) of RIPA Debt occurs and is continuing that permits any holder, or agent or representative for the holders, of RIPA Debt to accelerate its maturity and the Trustee receives a notice of such default (a “Payment Blockage Notice”) from the Company, any such holder, agent or representative or any other Person permitted to give such notice under this Indenture.
If the Trustee receives any Payment Blockage Notice pursuant to clause (ii) above, no subsequent Payment Blockage Notice shall be effective for purposes of this Section 13.02 unless at least 365 days shall have elapsed since the Trustee’s receipt of the immediately prior Payment Blockage Notice. No Nonpayment Default that existed or was continuing on the date of receipt of any Payment Blockage Notice by the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice.
(b) The Company may resume payments on or distributions to the Trustee or any Holder in respect of the Company’s obligations under the Notes or repurchase, redeem or otherwise acquire the Notes:
(i) in the case of a default referred to in clause ?(a)(i) above, upon the date on which such default is cured or waived or ceases to exist; and
(ii) in the case of a Nonpayment Default, the earlier of (i) the date on which such Nonpayment Default is cured, waived or ceases to exist, (ii) 179 days after the date on which the Payment Blockage Notice is received by the Trustee unless the maturity of any RIPA Debt has been accelerated, and (iii) the date on which all obligations in respect of the RIPA Debt have been paid in full in cash or other payment satisfactory to the holders of the RIPA Debt.
(c) Upon any dissolution, winding-up, liquidation or reorganization of the Company (whether voluntary or involuntary) or in bankruptcy, insolvency or similar proceedings, the Company shall pay the holders of RIPA Debt in full in cash or other payment satisfactory to the holders of the RIPA Debt all amounts due and owing thereunder before the Company pays the Holders.
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(d) If the Notes are accelerated because of an Event of Default or subject to repurchase by the Company at the option of the Holders following a Fundamental Change, the Company shall pay the holders of the RIPA Debt in full in cash or other payment satisfactory to the holders of the RIPA Debt all amounts due and owing thereunder before the Company pays the Holders.
(e) In the event that either the Trustee or any Holder of the Notes receives any payment of any obligations with respect to the Notes when (i) the payment is prohibited by this ?Article 13 and (ii) the Trustee or the Holder has actual knowledge that the payment is prohibited, the Trustee or the Holder, as the case may be, shall hold the payment in trust for the benefit of the holders of the RIPA Debt. Upon the proper written request of the holders of RIPA Debt or their agent or representative, the Trustee or the Holder, as the case may be, shall deliver the amounts held in trust to the holders of RIPA Debt or their proper agent or representative.
Section 13.03. Subrogation of Notes. (a) Subject to the payment in full, in cash or other payment satisfactory to the holders of the RIPA Debt, of all obligations under the RIPA Debt, the rights of the Holders shall be subrogated to the extent of the payments or distributions made to the holders of such RIPA Debt pursuant to the provisions of this Section 13.03 (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated to the RIPA Debt to substantially the same extent as the Notes are subordinated and is entitled to like rights of subrogation) to the rights of the holders of the RIPA Debt to receive payments or distributions of cash, property or securities of the Company applicable to the RIPA Debt until the principal of and accrued and unpaid interest, if any, on, the Redemption Price or Fundamental Change Repurchase Price of, or any cash portion of the Conversion Obligation (if the Company has elected Cash Settlement or Combination Settlement) (excluding cash payable in lieu of delivering fractional shares of Common Stock) due upon conversion of, the Notes shall be paid in full, in cash or other payment satisfactory to the holders of the Notes; and, for the purposes of such subrogation, no payments or distributions to the holders of the RIPA Debt of any cash, property or securities to which the Holders or the Trustee would be entitled under this Indenture except for the provisions of this ?Article 13, and no payment over, pursuant to the provisions of this ?Article 13, to or for the benefit of the holders of the RIPA Debt by the Holders or the Trustee shall, as between the Company, its creditors other than holders of the RIPA Debt and the Holders, be deemed to be a payment by the Company to or on account of the Notes. It is understood that the provisions of this ?Article 13 are and are intended solely for the purposes of defining the relative rights of the Holders, on the one hand, and the holders of the RIPA Debt, on the other hand.
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(b) Nothing contained in this ?Article 13 or elsewhere in this Indenture or in the Notes is intended to or shall impair, as among the Company, its creditors other than the holders of the RIPA Debt and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders the principal of the cash portion of the Conversion Obligation, if any, and any interest on the Notes as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of the RIPA Debt, nor shall anything herein or therein prevent the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this ?Article 13 of the holders of the RIPA Debt in respect of cash, property or securities of the Company received upon the exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Company referred to in this ?Article 13, the Trustee and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the RIPA Debt and other indebtedness of the Company, the amount thereof or payable thereon and all other facts pertinent thereto or to this ?Article 13.
Section 13.04. Authorization to Effect Subordination. Each Holder by the Holder’s acceptance thereof authorizes and directs the Trustee on the Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this ?Article 13 and appoints the Trustee to act as the Holder’s attorney-in-fact for any and all such purposes.
Section 13.05. Notice to Trustee. The Company shall give prompt written notice to the Trustee and to any Paying Agent of any fact known to the Company that would prohibit the making of any payment of monies to or by the Trustee or any Paying Agent in respect of the Notes pursuant to the provisions of this ?Article 13. Notwithstanding the provisions of this ?Article 13 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment of monies to or by the Trustee in respect of the Notes pursuant to the provisions of this ?Article 13, unless and until a Responsible Officer of the Trustee shall have received written notice thereof at the Corporate Trust Office from the Company or from a holder or holders of the RIPA Debt or from any trustee, agent or representative thereof; and before the receipt of any such written notice, the Trustee shall be entitled in all respects to assume that no such facts exist
The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of the RIPA Debt (or a trustee, agent or representative on behalf of such holder) to establish that such notice has been given by a holder of the RIPA Debt or a trustee, agent or representative on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of the RIPA Debt to participate in any payment or distribution pursuant to this ?Article 13, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of the RIPA Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this ?Article 13, and if such evidence is not furnished the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.
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Section 13.06. Trustee’s Relation to RIPA Debt. The Trustee in its individual capacity shall be entitled to all the rights set forth in this ?Article 13 in respect of the RIPA Debt at any time held by it, to the same extent as any other holder of the RIPA Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Any claims of the Trustee for compensation or indemnification shall not be subordinate to the RIPA Debt and shall be senior to the claims of Holders in respect of all funds collected or held by the Trustee.
With respect to the holders of the RIPA Debt, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 13, and no implied covenants or obligations with respect to the holders of the RIPA Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of the RIPA Debt, and, except with respect to its express obligations under this ?Article 13 the Trustee shall not be liable to any such holders of the RIPA Debt if the Trustee in good faith mistakenly pays over or distributes to Holders or to the Company or to any other Person, cash, property or securities to which any holders of the RIPA Debt are entitled by virtue of this ?Article 13 or otherwise.
Section 13.07. No Impairment of Subordination. No right of any present or future holder of the RIPA Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be charged with.
Section 13.08. Certain Conversions Not Deemed Payment. Notwithstanding anything to the contrary in this ?Article 13, the issuance and delivery of shares of the Common Stock (and cash in lieu of fractional shares of Common Stock) upon conversion of any Note in accordance with this Indenture and the Notes or otherwise in exchange for any Note shall be deemed not to constitute a payment on or distribution in respect of the obligations of the Company under any Note or any repurchase, redemption or other acquisition of any Note.
Section 13.09. Article Applicable to Paying Agents. If at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “Trustee” as used in this Article shall (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that the first paragraph of ?Section 13.05 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
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